When the broad market, reflected by an index such as the S&P 500, is in rally mode, investors want to capitalize. Picking potential big gainers can be tough, but using a few strategies and some Finviz tools, we can isolate a handful of stocks which are likely to outperform over the next month.

SEE: Broker Summary: TD Ameritrade Thinkorswim

When to Look for Big Gainers

The odds of picking big gainers are greatly increased during a bull market. As the market is rising, there will be stocks which are stronger than the market, and being able to profit is theoretically easier than when the overall market is in decline. Focus on finding big gainers and capitalizing when the trend is up. Stock picking in down market is more difficult, and therefore looking for safety is a better option. (For related reading, see Digging Deeper Into Bull And Bear Markets.)

Use the steps below to find strong stocks in a bull market. Figure one shows an example of the S&P as it is risingmaking higher highs and higher lows. This is the type of environment we want to capitalize on.

Figure 1 - Rising S&P 500. Source: Finviz Futures Charts

Finviz Steps to Find Strong Stocks

When the market is in an uptrend we are looking for stocks which are likely to outperform the market over the next month. This is accomplished by narrowing down the realm of stocks by using a few simple tools available on Finviz. From there, we will manually go through the small list of stocks to find the ones which are likely to move favorably and also suit our individual preferences.

  1. Sector Analysis Using Finviz
One of the easiest ways to narrow down the world of stocks is view stocks by sectors or groups. At any given time, one sector will be a strong and another will be weak, therefore, by looking at sector performance over different time frames we can see which sectors are performing well overall. These are the sectors we want to focus on when looking for stocks which are likely to perform well over the next month. (For related reading, see An Introduction To Sector Mutual Funds.)

Finviz provides a great visual tool for this, available under the "Groups" heading. Select the Bar Chart view to get a snapshot of sector performance over multiple time frames.

Figure 2 - Groups Tab. Source: Finviz


We want to look for the sector which appears near the top of the list, for performance, on the 1 Week, 1 Month and 3 Month time frames.

Look at the top three sectors using the 1 Week Performance bar chart. Then view the 1 Month and 3 Month performance. Pick the sector which appears most often near the top of the list on all three time frames.

Figure 3 shows sector performance over the last week, month and three month time frames. Notice the Services sector is ranked at the top on the weekly, second on the monthly and third on the three-month time frame. Consumer Goods is also doing well across the time frames, but in this case, Services is our top ranked performer. Therefore, Services is the sector we will focus on in our next step.

Figure 3. Sector Performance; Source: Finviz - Groups Page



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